Airbus aid: WTO says US can retaliate with tariffs on EU exports
Updated 16:12, 03-Oct-2019
Malcolm Brown

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The World Trade Organization (WTO) has given the US the go-ahead to impose billions of dollars of tariffs on European exports.

The WTO panel determined the US may impose tariffs worth nearly $7.5 billion a year as a countermeasure against illegal subsidies. The dues are in retaliation for illegal government aid to European plane maker Airbus. The decision awarded is the largest in WTO history, although President Donald Trump had sought $11 billion a year to match the annual losses he claims were inflicted by the European subsidies.

The EU side argued the US had exaggerated the harm caused.

The ruling follows a 15-year dispute between the US and the EU over state aid to civil aircraft manufacturers.

The WTO ruled that prohibited European subsidies had been provided to Airbus and that the US aircraft maker Boeing had been harmed, including through lost export sales of its large commercial aircraft.

In a statement released by Toulouse-based Airbus, the company noted the WTO panel's decision, but warned about the wider impact of any move to impose retaliatory tariffs in the aircraft sector. 

"This will create insecurity and disruption not only to the aerospace industry, but also to the broader global economy," the statement said.

The company's CEO Guillaume Faury vowed to "continue working with its US partners, customers and suppliers, to address all potential consequences of such tariffs that would be a barrier against free trade and would have a negative impact on not only the US airlines but also US jobs, suppliers, and air travelers."

Faury also expressed hope that the US and the EU will "find a negotiated solution."

The EU is also seeking its own retaliatory measures from the WTO, over American tax breaks for Boeing that harm Airbus. The WTO decision on that case is not expected until early next year.

The US has already indicated it plans to go ahead with the retaliatory tariffs and has lined up a long list of European products, ranging from aircraft to cheese that could be targeted. For procedural reasons, the earliest that could happen is 12 October.

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